Meanwhile, the market has also been supported by the Federal Reserve's stimulus measures, which have pushed interest rates down and made stocks more attractive.

"The U.S. is leading the pack in the recovery due to extraordinary levels of fiscal and monetary stimulus," wrote Deutsche Bank strategist Jim Reid in a research note.

In the latest edition of its Beige Book, the Fed said Wednesday that economic activity across its 12 districts expanded at a "modest to moderate pace" since it released the last edition in January. Fed officials, including chairman Ben Bernanke, have signaled that the central bank will continue to buy assets even as the economy improves.

After bottoming in March 2009, stocks have risen steadily as investors were drawn back into the market by attractive valuations. Analysts say stocks are still relatively cheap compared with earnings expectations, but bargains could be harder to come by as prices continue to rise.

On the corporate front, shares of Hovnanian(HOV) fell 2% after the homebuilder said it lost a worse-than-expected $11.3 million, or 8 cents per share, in the most recent quarter. Despite the latest results, Hovnanian said it expects to return to profitability this year.

JC Penney's(JCP) shares extended Tuesday's after the Wall Street Journal reported that some shareholders may start pushing for a new CEO if sales continue to slide. The struggling retailer is also in the third week of a court battle with Macy's(M), which claims that Martha Stewart Living Omnimedia(MSO) violated a previous agreement by entering into a new partnership with J.C. Penney.